Head of compliance services Neil Walkling says he is concerned that borrowers who have stretched themselves to the limit will blame brokers in a bid to get compensation.
Walkling says brokers, lenders and consumers all need to take responsibility for any financial difficulties that borrowers find themselves in and the FSA and Ombudsman should work with the industry to limit the damage from the crunch.
But he says the regulator must recognise that advised sales and allowing people to take responsibility for their decisions are not mutually exclusive. He says brokers should not be punished if their client makes a decision to disregard the advice given.
Walkling says the FSA should recognise reviewing the affordability of past mortgage sales is potentially a waste of resources because, unlike unsuitable investments, mortgages cannot be unwound.
He says the FOS should only consider affordability complaints if consumers have had the hard-sell or been misled on the cost of repayments. He says: “Regulation should not be used to pin the blame on brokers when many people took on huge mortgages with their eyes wide open.”
Unleash Advice Partnership IFA Adrian Kidd says: “Unscrupulous brokers who put their clients in jeopardy should have to pay compensation but good brokers should not be made the scapegoat.”